BAE Systems plc (BAESY) shares tumbled in London Tuesday after the aerospace and defence group confirmed it will shed nearly jobs as part of a restructuring plan aimed at holding its full-year earnings growth in-line with market forecasts.
BAE said that up to 1,400 jobs will be lost in its Military Air & Information business, while a further 525 roles will be cut from its Maritime Services and Applied Intelligence businesses. The group also confirmed its full-year guidance for earnings growth of around 5% to 10% over last year's tally of 40.3 pence per share and said that year-to-date business activity had been "in line with management expectations."
"These changes will drive competitiveness; accelerate technology innovation; and deliver continued improvements in efficiency and operational excellence," the company said in a statement. "The revised structure is consistent with, and builds on the focus areas outlined at the half year results of operational excellence, competitiveness and technology. The new air sector will bring together our international capabilities and expertise to compete more effectively for international opportunities and collaborations."
BAE shares were marked 1% lower by mid-morning in London and changing hands at 611.3 pence each, taking their three-month loss to around 3.01%.
BAE's won a key order for 24 Eurofighter Typhoon fighter jets, which sell at a list price of £90 million each, from Qatar last month as the Gulf state added to its defences amid a Saudi-led blockade and rising military tensions in the region. However, the group has seen orders for the jet slow, causing CEO Charles Woodburn to "review our production demand very carefully".
"We are confident that we will win further Typhoon orders, what we can't be confident around is the timing," he told investors on a conference call in early August.
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